Types of Mission Funds

The Generosity Trust offers three types of Mission Funds. Key differences are how the assets in the fund are managed and the fees (if any). Call or email The Generosity Trust to discuss your vision for a Mission Fund. We can help you determine what type of Mission Fund will be best for you.

Fund Type

Grant Turnaround Time

Assets

Earns Interest

Fees

Pass Through

Immediately

Kept in cash

No

None

Interest-Bearing

1-2 days

Invested for modest return

Yes

.2% of assets

Endowed

Grants should be planned in advance

Invested with the goal of achieving growth

Yes

.4%-1% of assets, depending on management structure

Pass Through

A pass-through type fund (the most common type) keeps assets completely liquid. We keep the assets invested in cash, ready for your recommendation. Your fund earns no interest on the assets in your Fund; we keep the interest to help cover the costs of running The Generosity Trust. There are absolutely no delays in making grant recommendations, and absolutely no cost to you.

Interest-Bearing

An interest-bearing fund is one where you want to experience very modest growth on the assets in your fund, but with no risk to those assets. We invest these funds in a variety of interest bearing instruments (CD's, money-market funds, etc) to try and achieve a modest return. Your Fund keeps the interest earned by the assets in your Fund, minus a reasonable 20 basis point fee (that's 0.2 % of the assets, determined on a quarterly basis). There may be a slight delay in the final approval of your grant recommendations, depending upon the liquidity available in your fund. We will work with you to determine your anticipated grant-making desires, so that we may keep adequate cash on hand. There are no other costs to you associated with this fund.

Endowed

An endowed fund is one you establish with the express purpose of achieving growth in the assets through active fund management — investment in stocks, bonds, and other assets. We will work with you to determine your grant recommendation goals for the long-term (six to twenty-four months out) to establish the best investment structure.

For an endowed fund with assets greater than $50,000, you may choose to have your own investment adviser or money manager invest these funds in a separate account. In those cases, we allow you to determine the fee structure with your manager; we simply charge a 40 basis point fee (0.4% of the assets, determined on a quarterly basis) for the oversight of the fund and the investment reporting. Or, you may choose to allow one of our equity managers to do the investing for you. In that case, we charge a 100 basis point fee (1% of the assets, determined on a quarterly basis), and we pay our fund manager out of that fee. Our default position on our long-term endowed assets is 60% equity, 40% fixed income — a balanced portfolio that we trust will produce a reasonable return over the long term.

All endowed funds have inherent risk, as with any assets actively managed in the equity and fixed income world. Liquidity concerns are carefully managed in these funds to provide adequate cash for grant making purposes.

You may also have a combination of two or more types of funds seamlessy working together. Let us show you how. To begin the process of creating your own Mission Fund, click here or contact us at (423) 266-5257.